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Condensed Interim Financial Statements for the six months ended 31 August 2022

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Consolidated Statement of Profit or Loss

Balance Sheet

Consolidated Statement of Other Comprehensive Income

Balance Sheet

Balance Sheet

Balance Sheet

Balance Sheet

Review of Performance

Consolidated statement of Comprehensive Income

Second quarter ended 31 August 2022 (“2Q FY2023”) vs Second quarter ended 31
August 2021 (“2Q FY2022”)

Revenue
The Group recorded revenue of RM34.5 million in 2Q FY2023, representing an increase
of 183.9% or RM22.4 million, over the revenue of RM12.1 million in 2Q FY2022. The
increase was mainly because all of the Group’s retail outlets were in full operations in the
current quarter under review. In the preceding year corresponding quarter, Malaysia
Government had imposed Full Movement Control Order (“FMCO”) which took effect on
1 June 2021 and none of the Group’s retail outlets were in operations during the FMCO
period.

Changes in inventories
Changes in inventories comprised the difference in the value of inventories at the
beginning and at the end of the financial period under review. In 2Q FY2023, the value
of the closing inventories was higher than the value of the opening inventories by RM24.0
million. In 2Q FY2022, the value of the closing inventories was higher by RM2.0 million.
This resulted in a variance of RM22.0 million for 2Q FY2023 vis-à-vis 2Q FY2022, which
was mainly due to higher purchases and consumption of inventories as all of the Group’s
outlets resumed operations in the current quarter under review.

Inventories purchased and material consumed
Inventories purchased and material consumed increased by 262.5% or RM32.2 million,
from RM12.3 million in 2Q FY2022 to RM44.5 million in 2Q FY2023. This was mainly due
to higher purchases and consumption of inventories as mentioned above.

Other Income
Other income increased by RM1.9 million or 103.0% from RM1.8 million in 2Q FY2022
to RM3.7 million in 2Q FY2023, mainly attributable to the higher reversal of inventories
written down by RM1.9 million. The net reversal of inventories written down was in
relation to certain inventories that were previously written down in accordance to the
Group’s inventory policy, but was subsequently sold in the current quarter under review.

Rental of premises
The rental of premises expenses showed an increase of RM1.5 million from RM0.06
million in 2Q FY2022 to RM1.5 million in 2Q FY2023. The increase in rental expenses
was mainly due to higher rental expenses incurred in FY2023 arising from the
resumption of airport outlets operations in 2Q FY2022.

Utilities and maintenance expenses
Utilities and maintenance expenses recorded an increase of RM0.2 million or 82.8%,
from RM0.3 million in 2QFY2022 to RM0.5 million in 2QFY2023 as a result of
resumption of operations of all of the Group’s retail outlets as mentioned earlier.

Unrealised foreign exchange gain
Unrealised foreign exchange gain in 2Q FY2023 of RM0.1 million was higher by RM0.5
million as compared to RM0.4 million loss in 2Q FY2022. This was mainly due to the
currency translation to Ringgit Malaysia of the Group’s deposits and bank balance in
financial institutions of SGD20.6 million and USD2.0 million as at 31 August 2022,
whereby Singapore Dollar had strengthened against Ringgit Malaysia by
approximately 0.3% from RM3.19 as at 31 May 2022 to RM3.20 as at 31 August 2022
and US Dollar had strengthened against Ringgit Malaysia by approximately 2.3% from
RM4.38 as at 31 May 2022 to RM4.48 as at 31 August 2022.

Other operating expenses
The Group incurred higher other operating expenses in 2Q FY2023 by RM2.8 million
or 118.5% as compared to RM2.3 million in 2Q FY2022, mainly attributable to
settlement payment made to Customs of RM1.5 million (please see note 19(ii) below)
as well as higher operating expenses incurred for freight charges, donation, insurance
and management fees by RM0.8 million during the period under review.
The rest of the expenses on the Group’s income statement remained largely
unchanged in 2Q FY2023 as compared to 2Q FY2022.

Profit before income tax
The Group reported a profit before income tax of RM2.8 million for 2Q FY2023, which
was RM9.8 million higher than loss before income tax of RM7.0 million recorded in 2Q
FY2022. The higher profit in 2Q FY2023 was mainly due to higher revenue achieved
as mentioned above, higher net reversal of inventories written down by RM1.9 million
as well as higher net foreign exchange gain of RM0.5 million. However, the positive
effect was partially offset by higher other operating expenses of RM2.8 million as well
as higher rental of premises of RM1.5 million.

Six months ended 31 August 2022 (“6M FY2023”) vs Six months ended 31 August
2021 (“6M FY2022”)

The Group recorded revenue for 6M FY2023 of RM59.1 million, representing an
increase of 29.7% or RM13.5 million, over the revenue of RM45.6 million in 6M
FY2022.

The Group reported a profit before income tax of RM4.7 million for 6M FY2023,
representing an increase of 172.2% or RM11.2 million as compared to a loss before
income tax of RM6.5 million recorded in 6M FY2022. The increase in profit was mainly
contributed by higher revenue achieved coupled with higher other operating income of
RM1.4 million which arising from net reversal of inventories written down and deposit
forfeited and higher net foreign exchange gain of RM0.8 million. However, the positive
effect was partially offset by higher other operating expenses of RM2.5 million and
higher of rental of premises of RM1.4 million as well as higher professional fees of
RM0.5 million.

Consolidated Statement of Financial Position

Property, plant and equipment
The decrease in net book value of the property, plant and equipment by RM1.8 million
was mainly due to the depreciation charge of RM1.9 million during the six month of
FY2023.

Right-of-use assets
The decrease in right-of-use assets by RM3.6 million was mainly due to the
depreciation charge of RM3.8 million during the six month of FY2023.
Trade receivables and other receivables
The decrease in trade and other receivables by RM2.5 million was mainly due to the
receipt of payments from certain debtors and deposit refunds during the six month of
FY2023.

Inventories
The increase in inventories of RM18.9 million was mainly due to higher purchases of
inventories in 2Q FY2023 following the resumption of operation of all the retail outlets
in the Group.

Trade and other payables
The increase in trade and other payables of RM21.9 million was mainly due to higher
purchases of inventories and higher rental payable which were not yet due for payment
as at 31 August 2022

Lease liabilities
The increase of lease liabilities of RM3.0 million was mainly due to addition of lease
liabilities of RM0.3 million recognised for lease renewal and accretion of interest of
RM3.2 million charged during the six month of FY2023. The additions were partially
offset by the payment of lease liabilities of RM0.3 million in the same period.

Consolidated Statement of Cashflow
The net cash flow generated by the Group from operating activities for 2Q FY2023 was
RM1.3 million which was higher by RM11.8 million as compared to the RM10.5 million
used in 2Q FY2022. This was mainly due to higher cash flow generated from operations
as a result of higher revenue recorded in the current quarter under review.

The net cash flow generated from investing activities in 2Q FY2023 was higher than
2Q FY2022 by RM0.02 million mainly contributed by higher interest income received
in the current quarter under review.

The net cash flows used in financing activities decreased by RM0.5 million as
compared to 2Q FY2022 mainly due to the absence of repayment of borrowings of
RM0.3 million and lower fixed deposit pledged of RM0.1 million which were recorded
in 2Q FY2022.

Where a forecast, or a prospect statement, has been previously disclosed to
shareholders, any variance between it and actual results
Not applicable.

19. A commentary at the date of the announcement of the significant trends and
competitive conditions of the industry in which the Group operates and any
known factors or events that may affect the Group in the next operating period
and the next 12 months
(i) The Malaysian economy registered a strong growth of 8.9% in the second
quarter of 2022 (1Q 2022: 5.0%)

1. Key economic sectors continued to expand
in the second quarter of 2022. Consumer-related subsectors such as retail and
leisure-related activities continued to recover amid the transition to endemicity,
reopening of the international borders, improving labour market conditions and
the additional support from Government’s policy assistance. However, the
recent rise of global inflation rates caused by the rising operating costs and
disruptions in supply chains, brought on by the ongoing geopolitical tension
and the prevailing COVID-19 restrictions in certain Asian countries, especially
China, have impacted the economic recovery rate.

In view of the above, the Group expects the business environment in which it
operates to remain challenging. However, the Group with its strong
fundamentals, is cautiously optimistic that its operations and financial
performance will gradually improve for the remaining period of the financial
year ending 28 February 2023.

Whilst the Group’s business is still in its recovery stage, the Group will remain
vigilant and continue to strategise, adapt and navigate through the changing
business environment and will continue to intensify efforts to minimise operating
risks and optimise its resources so as to ensure that its core businesses remain
resilient.

(ii) On 30 November 2017, the Company announced that the Company’s
subsidiary, Seruntun Maju Sdn. Bhd. (“SMSB”) had received the bills of
demand from the Royal Malaysian Customs (“Customs”), demanding payments
of customs duties, excise duties, sales tax and Goods and Services Tax
(“GST”) all totalling RM41,594,986.86. The said bills of demand were raised by
the Customs who alleged that SMSB did not comply with certain conditions of
a duty free shop located at the border.

On 29 June 2018, the High Court ruled against SMSB. On 2 July 2018, SMSB
filed an appeal to the Court of Appeal against the High Court’s decision of not
granting an application for judicial review. Simultaneously, SMSB also filed a
formal application to stay the effect and enforcement of the bills of demand
raised on SMSB for import and excise duties.

On 6 March 2019, the Court of Appeal heard the appeal whereby both SMSB
and the Customs submitted their respective legal arguments.

On 18 June 2020, the Court of Appeal unanimously ruled in favour of SMSB’s
appeal against the decision of the High Court and quashed the bills of demand
issued by the Customs for customs duties and excise duties amounting to
RM15,400,962.14 and RM23,560,972.94 respectively.

On 17 July 2020, the Customs applied to the Federal Court for leave to appeal
against the Court of Appeal’s decision. The Federal Court heard and dismissed
the Customs’ application on 11 January 2021 with costs.

Accordingly, the disputed bills of demand were set aside and SMSB has no
obligation to pay the Customs the sum of RM41,594,986.86 as demanded by
the Customs. In light of the Federal Court’s ruling in favour of SMSB, an
application was made to the Customs for the refund of the sales tax and GST
paid amounting to RM2,326,451.78, which was previously paid by SMSB to
the Customs. The Customs agreed to the refund on 27 April 2021 and the
amount of RM2,326,451.78 was received on 16 June 2021.

On 25 February 2021, the Royal Malaysian Customs (“Customs”) initiated
criminal proceedings pursuant to Section 65D and Section 138 of the Customs
Act 1967 (“Customs Act”) towards SMSB and its officers before the Magistrate
Court. The Company has engaged solicitors to represent SMSB and its
officers.

The criminal charges were made on the basis that SMSB and its officers had
breached the conditions of the duty free license issued by Customs to SMSB
under Section 65D of the Customs Act.

However, as mentioned above, in deciding to quash the bills of demand issued
to SMSB, the legality of the conditions that were allegedly breached was
challenged by SMSB through a judicial review application (civil proceeding) on
23 November 2017. On 18 June 2020, the conditions were unanimously held
by the Court of Appeal to be ultra-vires of Section 65D of the Customs Act and
that they ought to be quashed. On 11 January 2021, the Federal Court had
dismissed Customs’ appeal against the Court of Appeal’s decision with costs.
Customs had exhausted its rights to appeal and the conditions were
conclusively held to be ultra vires of the Customs Acts.

Thus, SMSB and its officers had pleaded not guilty and had claimed trial
against these charges brought by Customs.

On 6 July 2022, SMSB amicably reached a settlement with Customs whereby
Customs terminated all prosecution and investigation instituted against SMSB
and four of its officers. The settlement was recorded as a Consent Order in the
High Court of Taiping and on 15 July 2022, SMSB paid a compound of
RM1,500,000 to Customs with no admission of guilt or liability.

With the above-mentioned settlement with Customs, the said matter with Customs has
therefore been resolved.